Bitcoin fell below $82,000 on Tuesday: rising oil prices and ongoing geopolitical tensions weighed on risk sentiment as investors assessed the prospects for Fed rates ahead of next week's meeting. By 12:19, the largest cryptocurrency was trading around $81,511.2, approximately 1.5% lower for the day. In the previous session, Bitcoin rose above $83,000 but failed to maintain gains; earlier this month, it retreated from levels above $85,000.
Oil remained at elevated levels: Brent futures rose to $111.05 per barrel, a new five-month high. Attacks on Saudi Arabia's infrastructure and ongoing risks of disruptions in the Middle East kept energy markets tense, raising concerns that expensive fuel would sustain inflationary pressure. This could complicate the Fed's efforts to bring inflation back to the 2% target and limit its ability to ease policy. Tightening financial conditions and rising borrowing costs typically weigh on risk-sensitive assets, including cryptocurrencies, which have previously benefited from expectations of loose policy and improved liquidity.
Investors are focused on the Fed meeting on October 27-28 for clues about future rates. According to FedWatch, the probability of a rate hike at this meeting is 18%, while traders are pricing in a 75% chance for December. Recent inflation in the US has heightened concerns: consumer prices rose 3.7% year-on-year in September, with core inflation at 2.6%, both slightly above economists' expectations. Gasoline prices increased by 9.1% over the month, contributing more than half of the monthly CPI growth. This has reignited concerns that energy-driven inflation will keep rates high for longer.
This material is prepared solely for informational purposes and does not constitute financial advice or a recommendation.
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